FNAC # 2014 NOTIFICATION & INFORMATION BROCHURE. Thursday 15 May 2014 at 3PM Espace Grande Arche Esplanade de La Défense La Défense

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1 NOTIFICATION & INFORMATION BROCHURE FNAC # 2014 ORDINARY GENERAL MEETING Thursday 15 May 2014 at 3PM Espace Grande Arche Esplanade de La Défense La Défense

2 Notification & information brochure 2014 A Brief Introduction to Groupe Fnac With revenues of nearly 4 billion and over 15,000 employees in 2013, Fnac is the leader in the leisure and entertainment retail market in France and a major market player on the other countries where it operates, such as Spain, Portugal, Brazil, Belgium and Switzerland. Fnac offers an unrivaled range of editorial products (40% of sales) and consumer electronics (55% of sales), along with a full range of other services (5% of sales) that complement its core product offering, as well as ticketing and box office services. Fnac is a strong brand that encompasses the values of innovation, independence and expertise. It is the leading player in almost all of the product categories it offers and enjoys an excellent reputation and brand recognition. Fnac has a dense network of 176 multi-format stores in key locations combined with a fast-developing internet offering that attracts a high number of visitors. With over 10 million hits per month, fnac.com is the third-largest e-commerce website in France, and the most visited e-commerce website of all brick & mortar retailers. In 2013, online sales accounted for 13% of Fnac s revenues. This gives Fnac a click-and-mortar network that enables it to benefit from synergies between its retail store network and its internet presence and implement its omni-channel strategy. The brand s reputation and marketing concept enable it to generate a huge amount of traffic both in-store and online. As a result, Fnac has a large customer base, with a core platform of five million members who account for more than half of its revenues. This is unique in the retail sector. These loyalty program members are customers with high purchasing power and are generally more urban-based and more adept internet users than the average consumer. To address the structural changes in the markets and the deterioration of macroeconomic conditions, in September 2011, Fnac implemented a new strategic plan called Fnac 2015, which is based around four objectives: Ramping up the omni-channel strategy Developing closer ties with customers Developing levers for growth, both in terms of new product categories and new store formats Improving operational efficiency

3 The English language version of this document is a free translation from the original, which was prepared in French. All possible care has been taken to ensure that the translation is an accurate representation of the original. However in all matters of interpretation of information, views or opinion expressed therein the original language version of the document in French takes precedence over the translation. Contents How to participate in the General Meeting 2 Brief overview of Group activities 6 Net financial income of Groupe Fnac for the last five years 9 Composition of the Board of Directors 10 Agenda of the Ordinary General Meeting 11 Draft resolutions submitted to the Ordinary General Meeting of May 15, 2014, and Objectives 12 Statutory Auditors Report on the Annual Financial Statements closed on December 31, Statutory Auditors Report on the Annual Consolidated Financial Statements ended on December 31, Special Statutory Auditors Report on the Regulated Agreements and undertakings referred to in Articles L and L of the French Commercial Code 21 Statutory Auditors Report prepared in accordance with Article L of the French Commercial Code regarding the Report of the Chairman of the Board of Directors of Groupe Fnac SA 24 Independent Third-Party Report on the Consolidated Social, Environmental and Corporate Information reflected in the Management Report 25 Request for documents and information 27

4 HOW TO PARTICIPATE IN THE GENERAL MEETING How to participate in the General Meeting: WHAT CONDITIONS MUST BE FULFILLED TO PARTICIPATE IN THE GENERAL MEETING? All shareholders, regardless of the number of shares they hold, have the right to participate in the General Meeting. To do so, they must demonstrate ownership of their shares, which must be recorded in their name, whether they are in registered or bearer form, as of the third business day before the General Meeting; (Monday, May 12, at midnight Paris time) (hereinafter, D-3 ). Should you transfer shares after giving notice of your intention to vote by mail but before D-3, the financial intermediary must give notice of the transfer and send the necessary information. After May 12, 2014 at midnight, no notification may take place. As a result: For registered shareholders, the registration of their shares in the Company register (managed by CACEIS Corporate Trust, depository of the register of shareholders and central organizer of the General Meeting mandated by the Company) by D-3 is sufficient; no other procedure is necessary. For bearer shareholders, institutions holding bearer share ( financial intermediaries ) shall provide evidence directly directly for the shareholder status of their clients to CACEIS Corporate Trust (mandated by the Company) by producing a shareholding certificate that they attach to the single voting form or the request for an admission card. SHOULD YOU WISH TO EXERCISE YOUR RIGHT TO VOTE You have four options: personally attend the General Meeting; vote by mail; give proxy to the Chairman of the General Meeting; give proxy to a third party (any person of your choice). In all cases, you must fill out, date and sign the hereto attached single voting form and admission card request and send it to your financial intermediary no later than May 12, Shareholders with registered shares may use the prepaid envelope that was provided along with the single voting form or, in its absence, send the form by mail (at the current postal rate) to CACEIS Corporate Trust Service Assemblées Générales Centralisées 14, rue Rouget de Lisle ISSY-LES-MOULINEAUX Cedex 9, France; Shareholders with bearer shares must obtain the single voting form from their financial intermediary and return it to their intermediary by mail (at the current postal rate). (The intermediary will forward the single voting form, accompanied by the shareholding certificate that they will have previously drawn up.) Shareholders who have already voted by mail, sent a proxy or requested an admission card can no longer choose another mode of participation. They may however transfer all or part of their shares. However, if the share transfer takes place before the third business day prior to the meeting (May 12, 2014 at midnight Paris time) the company will consequently invalidate or modify, as applicable, the vote sent by mail, the proxy, the admission card or the certificate of shareholding. To this end, the financial intermediary shall give notice of the share transfer to the company or to CACEIS and send to CACEIS the necessary information. No share transfer or any other operation performed after May 12, 2014 at midnight Paris time shall be reported by the financial intermediary or taken into consideration by the company whatever the means used, notwithstanding any agreement to the contrary. 2 Ordinary General Meeting 2014 FNAC

5 HOW TO PARTICIPATE IN THE GENERAL MEETING You wish to attend the General Meeting personally If you hold REGISTERED shares, you may : request an admission card giving you faster access to the meeting room by checking box A and returning the single voting form in the prepaid envelope that was sent to you; or present yourself directly at the counter specially provided for the purpose with an identification document. If you not have received your admission card by May 12, 2014 at the latest, you may contact CACEIS Corporate Trust from Monday to Friday, 8:30 AM to 6:00 PM (Paris time) at: (0) or by (ct-contact@caceis.com) for any information regarding processing. If you hold BEARER shares, you must request an admission card, which is essential for admission to the Meeting: by checking box A in the upper part of the single voting form; by returning this form as soon as possible to the financial intermediary managing your securities account, who will forward your request accompanied by a shareholding certificate. In any event, if you have not received your admission card by May 12, 2014, at the latest, you should request your financial intermediary to issue you a shareholding certificate that will enable you to demonstrate your shareholder status as of D-3 in order to be admitted to the General Meeting. Directions to the meeting Espace Grande Arche Esplanade de La Défense La Défense Using public transit: Exit at Sortie A Grande Arche at the La Défense Grande Arche station Métro: Line 1 RER: Line A Train (SNCF): Lines from Paris to any of the following: Saint-Lazare, Saint-Nom-la-Bretèche or Versailles-RD, Saint-Quentin-en-Yvelines, La Verrière) Bus: Lines 73, 141, 144, 159, 258, 262, 272, 275, 278, 360, 378, 161, 174, 178 By car from Paris and the Boulevard Périphérique: Porte Maillot exit toward La Défense At La Défense, exit onto the Boulevard Circulaire Exit at Parking CNIT (parking area for visitors and exhibitors) Two other parking options: La Défense 4 Parking Centre exit - La Défense 6 Parking Coupole exit You do not wish to attend the General Meeting in person If not personally attending the General Meeting, you may choose one among the following formulas: To vote by mail: check the box vote by post of the individual form and, where applicable, shade the boxes corresponding to the resolutions you do not approve of; To give proxy to the Chairman of the General Meeting: check the box I hereby give proxy to the Chairman of the General Meeting in the individual form. In this case, the Chairman will vote in favor of the draft resolutions and amendments presented or agreed to by the board of directors, or against them if the Board of directors does not approve the draft resolutions and/ or amendments. To give proxy to a third party (any person of your choice): check the box I hereby appoint in the individual form and indicate the name and address of the person you authorize to attend the General Meeting and vote on your behalf. (Authorizations are revoked under the same formal conditions as those used to grant them.) In accordance with the provisions of Article R of the French Commercial Code, notice of the appointment and revocation of a proxy may likewise be given electronically as follows: registered shareholders: by to the following address: ct-mandataires-assemblees-fnac@caceis.com, specifying their first and last name, address and CACEIS Corporate Trust ID for direct registered shareholders (information available on the upper left side of their securities account statements) or, for managed registered shareholders, their financial intermediary s ID, along with the surname and name of the proxy appointed or revoked; bearer shareholders: by to the following address: ct-mandataires-assemblees-fnac@caceis.com, specifying their first and last name, address and complete bank details along with the surname and name of the proxy appointed or revoked, and then requesting the financial intermediary to send a written confirmation (by mail) to CACEIS Corporate Trust Service Assemblées Générales Centralisées 14, rue Rouget de Lisle ISSY-LES-MOULINEAUX Cedex 9, France (or by fax to (0) ). In accordance with the law, all the documents that must be presented to this General Meeting are available to shareholders at the Groupe Fnac registered office and on the company s website They can also be sent on request from CACEIS Corporate Trust (see attached form). Ordinary General Meeting 2014 FNAC 3

6 HOW TO PARTICIPATE IN THE GENERAL MEETING How to complete the form STEP I STATE HOW YOU WANT TO PARTICIPATE * IF YOU WANT TO ATTEND THE MEETING: check box A to receive your admission card; then date and sign the lower part of the form. * IF YOU WON T BE ATTENDING THE MEETING: choose absentee voting method 1, 2 or 3 below. 1 TO VOTE BY POST: Check here; then date and sign the lower part of the form Vote YES to a resolution by leaving the box of that resolution number empty. Vote NO to a resolution or abstain from voting by shading the box of that resolution number. 2 TO GIVE PROXY TO THE CHAIRMAN OF THE GENERAL MEETING: Check here; then date and sign the lower part of the form. 3 TO GIVE PROXY TO A THIRD PARTY (ANY INDIVIDUAL OR LEGAL PERSON OF YOUR CHOICE) TO REPRESENT YOU AT THE MEETING: Check here, write the address of that person, then date and sign the lower part of the form. A IMPORTANT : Avant d exercer votre choix, veuillez prendre connaissance des instructions situées au verso - Important : Before selecting please refer to instructions on reverse side Quelle que soit l option choisie, noircir comme ceci la ou les cases correspondantes, dater et signer au bas du formulaire - Whichever option is used, shade box(es) like this, date and sign at the bottom of the form A. Je désire assister à cette assemblée et demande une carte d admission : dater et signer au bas du formulaire. / I wish to attend the shareholder s meeting and request an admission card : date and sign at the bottom of the form. B. J utilise le formulaire de vote par correspondance ou par procuration ci-dessous, selon l une des 3 possibilités offertes / I prefer to use the postal voting form or the proxy form as specified below. CADRE RÉSERVÉ À LA SOCIÉTÉ - FOR COMPANY S USE ONLY GROUPE FNAC Société anonyme au capital de Siège social : 9, rue des Bateaux-Lavoirs, ZAC Port d Ivry Ivry-sur-Seine R.C.S. CRETEIL Identifiant - Account Nombre d actions Number of shares [ Nominatif Registered Porteur Bearer [ Vote simple Single vote Vote double Double vote Nombre de voix - Number of voting rights FORMULAIRE DEDIE AUX SOCIETES FRANCAISES / FORM RELATED TO FRENCH COMPANIES 1 JE VOTE PAR CORRESPONDANCE / I VOTE BY POST Cf. au verso (2) - See reverse (2) Je vote OUI à tous les projets de résolutions présentés ou agréés par le Conseil d Administration ou le Directoire ou la Gérance, à l EXCEPTION de ceux que je signale en noircissant comme ceci la case correspondante et pour lesquels je vote NON ou je m'abstiens. I vote YES all the draft resolutions approved by the Board of Directors, EXCEPT those indicated by a shaded box like this, for which I vote NO or I abstain Sur les projets de résolutions non agréés par le Conseil d Administration ou le Directoire ou la Gérance, je vote en noircissant comme ceci la case correspondant à mon choix. On the draft resolutions not approved by the Board of Directors, I cast my vote by shading the box of my choice like this. A B C D E Oui / Yes Non/No Abst/Abs Si des amendements ou des résolutions nouvelles étaient présentés en assemblée / In case amendments or new resolutions are proposed during the meeting - Je donne pouvoir au Président de l assemblée générale de voter en mon nom. / I appoint the Chairman of the general meeting to vote on my behalf... - Je m abstiens (l abstention équivaut à un vote contre). / I abstain from voting (is equivalent to vote NO)... - Je donne procuration [cf. au verso renvoi (4)] à M., Mme ou Mlle, Raison Sociale pour voter en mon nom... / I appoint [see reverse (4)] Mr, Mrs or Miss, Corporate Name to vote on my behalf... Pour être prise en considération, toute formule doit parvenir au plus tard : In order to be considered, this completed form must be returned at the latest: F G H J K Oui / Yes Non/No Abst/Abs 2 JE DONNE POUVOIR AU PRÉSIDENT DE L ASSEMBLÉE GÉNÉRALE Cf. au verso (3) I HEREBY GIVE MY PROXY TO THE CHAIRMAN OF THE GENERAL MEETING See reverse (3) JE DONNE POUVOIR À : Cf. au verso (4) I HEREBY APPOINT: See reverse (4) M. Mme ou Mlle, Raison Sociale / Mr, Mrs or Miss, Corporate Name Adresse / Address ATTENTION : s il s agit de titres au porteur, les présentes instructions ne seront valides que si elles sont directement retournées à votre banque. CAUTION : if it is about bearer securities, the present instructions will be valid only if they are directly returned to your bank. Nom, prénom, adresse de l actionnaire (si ces informations figurent déjà, les vérifier et les rectifier éventuellement). Cf au verso (1) Surname, first name, address of the shareholder (if this information is already supplied, please verify and correct if necessary). See reverse (1) Date & Signature STEP III Whatever you choose, date and sign here. 3 STEP II ENTER HERE your surname and address or check that they are already shawn. à la banque / to the bank à la société / to the company sur 1 ère convocation / on 1st notification sur 2 ème convocation / on 2nd notification 4 Ordinary General Meeting 2014 FNAC

7 HOW TO PARTICIPATE IN THE GENERAL MEETING IF YOU WANT TO ASK A QUESTION During the General Meeting, you will have the chance to ask questions during the Q&A session that precedes voting on the resolutions. You may likewise send in your written questions prior to the meeting, addressed to the Chairman of the Board of Directors, at the latest, on the fourth business day before the date of the General Meeting; i.e., Friday, May 9, 2014: by certified mail with confirmation of receipt, to Groupe Fnac, 9, rue des Bateaux-Lavoirs, ZAC Port d Ivry, Ivry-sur-Seine; or by to: actionnaires@groupe-fnac.com. Written questions must be accompanied by a shareholding certificate. Ordinary General Meeting 2014 FNAC 5

8 BRIEF OVERVIEW OF GROUP ACTIVITIES Brief overview of Group activities Commenting on the Groupe Fnac s annual results for 2013, Alexandre Bompard said: 2013 was a positive year for Fnac. In addition to our successful stock exchange listing, the results achieved show general growth for the company in terms of its operational performance, commercial dynamics (as illustrated by market share growth) and sound financial structure. This performance, which is the result of a strong commitment from all of our teams, confirms the relevance of the choices made and the objectives we have set for 2016, encouraging us to continue moving forward with our transformation. ( millions) Change Revenues 4,061 3,905 (3.8%) Chg. at constant exchange rates (3.1%) Current operating income % Consolidated net income (142) 15 N/A Net current income (a) % Free cash flow from operations (57) 48 N/A Net cash and liquid assets (b) N/A Shareholders equity % (a) Net current income from continuing operations, Group share, excluding non-current items. (b) Pro forma net cash 2012: 422M (after accounting for operations to strengthen equity undertaken at the start of 2013). Highlights of the Financial Year Fnac reported an increase in current operating income ( 9 million, i.e. +13%) which reflects the improvement in the company s performance. The financial profile changed with a return to cash generation (free cash flow of 48 million). The already sound financial structure became even stronger. The Group consolidated its leading position in its various markets and continued to achieve gains in market share. They are the result of good execution of the Fnac 2015 plan and an offensive commercial strategy. The 4th quarter of 2013 marked an acceleration in revenues and market share gains. The success of the omni-channel proposal In 2013, the Group continued to strengthen its omni-channel strategy. Thanks to these efforts, omni-channel sales (internet sales with a link to the store) rose considerably in 2013 and accounted for almost 30% of the total sales of Fnac.com (an eight-point increase compared with 2012). The growth in omni-channel sales was the result of more effective coordination between the store network and the internet and mobile sites. Thanks to investment in m-commerce solutions, mobile sales doubled. The increase in sales on the website was also due to a major increase of the marketplace in France, and the successful launch of the Spanish marketplace. Offensive commercial policy Major marketing investments gave rise to increased competitiveness as regards both traditional and pure-play competitors. These price investments were supported by powerful, visible commercial operations. At the same time, customer services were strengthened through concrete measures, including the development of sales force cashing and a significant reduction in the preparation time of Fnac.com orders. The NPS customer satisfaction score has risen by 10 points since the fall of The Fnac membership program now has over five million members (+7% compared with 2012). Growth levers: success of new product categories and new store formats The deployment of new product categories (Games & Toys, Home & Design, Stationery, No-Contract Phones and Connected Devices) accelerated in 2013 in all countries where the Group has a presence. At the end of December 2013, the Games & Toys and Home & Design departments were deployed throughout the entire store network. Deployment was begun on the Stationery, Telephony and Connected Devices departments. These new categories extended the brand territory to leisure products, thereby targeting more families. The sales performance of these products was highly satisfactory. These new product categories accounted for almost 6% of revenues in Ordinary General Meeting 2014 FNAC

9 BRIEF OVERVIEW OF GROUP ACTIVITIES The Group continued to expand its store network in France, mainly through new formats for development in high-traffic areas (travel format) or smaller areas (proximity format). These stores, operated in franchise, benefit from omni-channel functionalities and thereby contribute to the development of Fnac.com. At the end of December, the store network in France comprised 20 stores with these new formats (five of which were opened in 2013). These new store formats have been deployed abroad, with the opening of a travel store and a proximity store in Lisbon. The Group also announced that it had signed a franchise agreement with Darwish Holding, a pioneer in the specialist retailing segment in the Middle East, to establish a presence in Qatar. The first store operating under the Fnac banner will open in the fall of Continuation of cost-saving policy To complement these sales initiatives, the Group continued with its cost-saving and organizational efficiency policy. This policy resulted in 55 million in new cost savings actions (1) in 2013, as part of the objective of 80 million. Over the period, the cost base was reduced by almost 12%. A successful initial public offering Simultaneously, the Group successfully began trading on the stock market on June 20, In the second half of the year, new shareholders entered the capital, thereby demonstrating their confidence in the Group s strategy and outlook. Operational Performance in 2013 Throughout 2013, the Group s consolidated revenues amounted to 3,905 million, a 3.8% decrease compared with There was a negative exchange rate impact of 0.7%, primarily due to the fall in the Brazilian real against the euro. At constant exchange rates, the decline in the Group s consolidated revenues was 3.1% for the year. The gross margin rate in 2013 was 29.8%, compared with 30.0% in 2012, and was resilient despite major investments in pricing and promotion. The pooling of goods purchases between France, Switzerland and Belgium, combined with good management of commercial operations and closer collaboration with certain key suppliers, largely offset the investments made in pricing and promotion. In 2013, the Group continued its efforts to improve operational efficiency and reduce costs. The cost reduction measures implemented in 2013 generated 55 million of savings (1) over the period. They are part of an overall ambition to achieve 80 million of savings between 2013 and 2014 (full-year effect). Costs fell by 5.5% in 2013, and represent 28.0% of revenues, compared with 28.5% in After decreasing for two years, the current operating income of the Group rose by 13.3% compared with 2012 to reach 72 million. Highlights by Reporting Segment Revenues decreased by 2.7% in France against the backdrop of a deteriorating consumer environment and declining markets in most categories. The Group continued to outperform the market, in both cultural and technical products, with market share gains of 0.5 points and 0.6 points respectively (Source: GFK). The growth of internet sales accelerated in the second half of the year. The Group continued its expansion with the opening of five franchise stores (three travel stores and two proximity stores) and a directly operated store (Beaugrenelle). The operational margin was 1.5%, compared with 1.6% in In 2013, macroeconomic conditions remained unfavorable in the Iberian Peninsula, resulting in a 4.2% drop in revenues in the region. Portugal showed resilience, with stable sales throughout the year, gaining a substantial market share and thereby reinforcing its leading position in the market. In September, Fnac Spain s sales trend reversed, thanks to the chain s strengthened sales dynamics and a gradual improvement in customer confidence. Internet sales in the Iberian Peninsula enjoyed sustained growth, with a clear acceleration in the second half of the year. Current operating income increased by 20%. The operational margin was 3.3% (compared with 2.6% in 2012). Revenues in Brazil fell by 1.0% at constant exchange rates (-13.3% at current exchange rates). After a disappointing start to the year, sales performance gradually improved, sustained by the sales recovery plan launched in the first half. Revenues rose by 6% in the second half of the year, compared with a decrease of 8.9% in the first half. Internet sales underpinned the improvement in activity. Current operating income was positive for the period ( 0.7 million, compared with an operational loss of 5.7 million in 2012) thanks to good operational management. Sales in the other countries region, which includes Switzerland and Belgium, dropped by 5.6% at constant exchange rates (-6.3% at current exchange rates) in deteriorated markets. Despite difficult sales performance, current operating income rose by 24.6% thanks to the benefits of the pooling of purchases with France and cost reduction efforts. (1) Including the beneficial impact of the CICE. Ordinary General Meeting 2014 FNAC 7

10 BRIEF OVERVIEW OF GROUP ACTIVITIES Financial Performance Other non-current operating income and expenses constituted a net expense of 29 million in 2013 and were down from 2012 (- 130 million). In particular, they included the cost of organizational changes and provisions for risks and charges. The improvement in net financial income reflects a stronger Group financial position. The decrease in tax expenses was mainly linked to establishment of a tax consolidation group in France in January Net income from continuing operations, Group share, amounted to a positive 16 million in 2013, a significant improvement compared with 2012 (loss of 116 million). Excluding non-current items, current net income from continuing activities was 43 million in 2013, compared to 13 million in 2012, an increase of +224%. Financial Structure Free cash flow from operations amounted to 48 million in This figure was a negative 57 million in This significant improvement in cash generation was the result of good management of operating investments and effective actions implemented to optimize working capital requirements, in particular the ongoing inventory reduction policy. The Group strengthened its financial position during the period. Equity capital amounted to 540 million as of December 31, 2013 (compared to 527 million as of December 31, 2012 on a pro forma basis (1) ). Available cash amounted to 461 million as of December 31, 2013 (compared to 422 million on a pro forma basis as of December 31, 2012 (1) ). Conclusions and Outlook The 2013 results demonstrate the rapid execution of strategic initiatives to adapt the Group s business and financial model according to market developments. They also reflect the banner s solidity, based on the strength of the Fnac brand, a large customer base, a loyalty program unique to the sector, and a powerful and effective omni-channel proposal. In markets that are expected to remain difficult in 2014, the Group intends to continue to gain market share by stepping up the redesign of its business model, which is mainly based on the continuing deployment of new product categories, ongoing establishment of the omni-channel strategy and accelerated expansion of new formats in France and abroad. It will also continue its cost-saving and organizational efficiency policy. (1) After accounting for operations to strengthen equity undertaken at the start of Ordinary General Meeting 2014 FNAC

11 Net financial income of Groupe Fnac for the last five years Net financial income of Groupe Fnac for the last five years Capital at year end Share capital (in euros) 16,595, ,718, ,131, ,131, ,131,671.0 Number of ordinary shares in circulation 16,595, ,131, , , ,953.0 Maximum number of future shares to be created by conversion of bonds by the exercise of stock options Operations and earnings for the year (in thousands of euros) Income from ordinary activities 8, Earnings before tax, employee profit-sharing, and provisions for amortization and depreciation (9,034.7) (5,920.8) 170, ,216.7 (11,758.2) Employee profit-sharing payable for the year Income tax (expense)/credit 10, (707.3) Earnings after tax, employee profit-sharing, and provisions for amortization and depreciation 1,165.0 (331,968.2) 172, ,090.1 (13,152.7) Distributed earnings , Data per share (in euros) Earnings after tax and employee profit-sharing, but before provisions for amortization and depreciation 0.07 (0.97) (13.42) Earnings after tax, employee profit-sharing, and provisions for amortization and depreciation 0.07 (54.14) (15.02) Dividend: net dividend per share Personnel Average number of employees during the year Total payroll for the year (in thousands of euros) 9, Amount paid for employee benefits for the year (in thousands of euros) 3, Ordinary General Meeting 2014 FNAC 9

12 COMPOSITION OF THE BOARD OF DIRECTORS Composition of the Board of Directors Name Alexandre BOMPARD Patricia BARBIZET Stéphane BOUJNAH (a) Carole FERRAND (b) Antoine GOSSET-GRAINVILLE (a) Alban GRÉGET (b) Nonce PAOLINI (a) Arthur SADOUN (a) (a) (b) Brigitte TAITTINGER-JOUYET Director Jacques VEYRAT (a) (a) Independent directors. (b) Directors subject to renewal of term by the Ordinary General Meeting of Shareholders of May 15, Main position in the company Chairman, Chief Executive Officer Director, Vice Chairman Director Director Director Director Director Director Director Personal information concerning the directors whose renewal of term is subject to the approval of the Annual General Meeting of May 15, 2014 Patricia Barbizet Vice Chairman of the Board of Directors Graduate of the École Supérieure de Commerce de Paris. Ms. Barbizet started her career in the Renault Group as Treasurer of Renault Véhicules Industriels before becoming Chief Financial Officer of Renault Crédit International. She joined the Pinault Group in 1989 as a financial officer. In 1992, she became the Chief Executive Officer of Artémis, and in 2004, Chief Executive Officer of Financière Pinault. She is currently the Chief Executive Officer of Artémis Group, Vice Chairman of the Board of Directors of Kering and the Chairman of Christie s International. Carole Ferrand Director Graduate of the École des Hautes Études Commerciales (class of 1992). Ms. Ferrand started her career at PriceWaterhouseCoopers, where she was an auditor and later a financial advisor in the Transaction Services division. In 2000, she joined Sony France, the French subsidiary of the consumer and professional electronic branch of the Sony Corporation group, as Financial Director before becoming Secretary General in In 2011, she held the position of Chief Financial Officer of the Europacorp group. Since January 2013, she has been Chief Financing Officer of the Artémis Group. Alban Gréget Director Graduate of l École Supérieure des Sciences Économiques et Commerciales. Mr. Gréget was an analyst in Corporate Finance at Société Générale in Paris and then in London ( ). From 2001 to 2008, he was an Analyst and Associate before becoming Vice President of mergers and acquisitions at Merrill Lynch in Paris. Since March 2008, he has been Director of Investments for the Artémis group, where he is in charge of new investments, merger and acquisition transactions and the strategic and financial oversight of certain investments. He is a Director of several Groupe Kering companies. 10 Ordinary General Meeting 2014 FNAC

13 AGENDA OF THE ORDINARY GENERAL MEETING Notice of Ordinary General Meeting Shareholders are informed that they are called to attend the Ordinary General Meeting on Thursday, May 15, 2014 at 3:00 PM at the following adress: Espace Grande Arche Esplanade de La Défense La Défense Agenda of the Ordinary General Meeting 1. Approval of corporate financial statements for the financial year ended on December 31, Approval of consolidated financial statements for the financial year ended on December 31, Allocation of income from the financial year ended on December 31, Approval of a regulated agreement concluded between Kering and Groupe Fnac in accordance with Article L paragraph 3 of the French Commercial Code. 5. Approval of the non-compete commitment of Alexandre Bompard, Chairman and Chief Executive Officer, in accordance with Articles L paragraph 6 and L et seq. of the French Commercial Code. 6. Approval of the commitment regarding to the participation of Alexandre Bompard, Chairman and Chief Executive Officer to a supplementary pension scheme, in accordance with Articles L paragraph 6 and L et seq. of the French Commercial Code. 7. Approval of the agreement between Groupe FNAC and Kering BV regarding the issuance of perpetual deeply subordinated notes (TSSDI) by Groupe Fnac SA in accordance with Article L et seq. of the French Commercial Code. 8. Approval of the agreement on removal from tax consolidation between Kering SA and Groupe Fnac SA and its French subsidiaries, in accordance with Article L et seq. of the French Commercial Code. 9. Approval of the agreement on tax consolidation between Groupe Fnac SA and its French subsidiaries, in accordance with Article L et seq. of the French Commercial Code. 10. Renewal of term of director of Ms. Carole Ferrand. 11. Renewal of term of director of Ms. Brigitte Taittinger-Jouyet. 12. Renewal of term of director of Mr. Alban Gréget. 13. Authorization for the Board of Directors to trade in the Company shares. 14. Opinion regarding compensation components due or attributed to Alexandre Bompard, Chief Executive Officer, for the financial year ended on December 31, Powers to accomplish formalities. Ordinary General Meeting 2014 FNAC 11

14 Draft resolutions submitted to the Ordinary General Meeting of May 15, 2014, and Objectives Draft resolutions submitted to the Ordinary General Meeting of May 15, 2014, and Objectives Approval of annual accounts and allocation of net income Objectives of the Resolutions 1 to 3 The purpose of the First Resolution is to approve the corporate financial statements of Groupe Fnac for FY 2013, which record a net income of 1,109, The purpose of the Second Resolution is to approve the consolidated financial statements of Groupe Fnac for FY The purpose of the Third Resolution is to allocate the income. First Resolution Approval of corporate financial statements for FY 2013 The General Meeting, deciding under the conditions of quorum and majority required by Ordinary General Meetings, having reviewed the management report of the Board of Directors and the auditors report, approves the corporate financial statements for the financial year ended on December 31, 2013, as presented, comprising the balance sheet, the income statement and the notes, as well as the transactions reflected in these statements and summarized in these reports. Second Resolution Approval of consolidated financial statements for FY 2013 The General Meeting, deciding under the conditions of quorum and majority required by Ordinary General Meetings, and having reviewed the management report of the Board of Directors and the statutory auditors report, approves the consolidated financial statements for the financial year ended on December 31, 2013, as presented, comprising the balance sheet, the income statement and the appendix, as well as the transactions reflected in these statements and summarized in these reports. Third Resolution Allocation of net income from the financial year ended on December 31, 2013 The General Meeting, having reviewed the report of the Board of Directors, and deciding under the conditions of quorum and majority required by Ordinary General Meetings, notes that the financial statements established on December 31, 2013 and approved by the Meeting show a net income of 1,109, for the financial year and decides, upon proposal of the Board of Directors: to allocate the 2013 fiscal year s net income of 1,109, as retained earnings, which, given the previous balance of - 1,692,591.42, will result in a new balance of - 582, In accordance with the law, the General Meeting notes that, for the three financial years prior to FY 2013, the dividends distributed and income eligible for the tax reduction referred to in 3.2 of Article 158 of the French General Tax Code (CGI) were as follows: FY ending on December 31 Number of dividendbearing shares Dividend per share (in euros) Total (in euros) Distributed earnings per share (in euros) Eligible for 40% tax reduction as per 3.2 of Art. 158 CGI Not eligible for 40% tax reduction as per 3.2 of Art. 158 CGI , ,854, , ,533, Ordinary General Meeting 2014 FNAC

15 Draft resolutions SUBMITTED to the Ordinary General Meeting of May 15, 2014, and Objectives Regulated Agreements Objectives of the Resolutions 4 to 9 In the Fourth Resolution, you are asked to approve the regulated agreement mentioned in the special statutory auditors report in Section 3.7 of the Registration Document, concluded in the course of the financial year in accordance with Article L paragraph 3 of the French Commercial Code. This agreement concerns the allocation between Kering and Groupe Fnac of the extraordinary expenses relating to the admission of the company shares for trading on the Euronext Paris stock market, at the end of which Groupe Fnac invoiced a net amount of 3,005,876.88, excluding taxes. In the Fifth Resolution, you are asked to approve the regulated agreement mentioned in the statutory auditors special report in Section 3.7 of the Registration Document, concluded in the course of FY 2013 in accordance with Article L paragraph 6 of the French Commercial Code. This regards a non-compete commitment between the company and its Chairman and Chief Executive Officer, Alexandre Bompard, authorized as per deliberation of the company Board of Directors on July 30, This commitment, limited to a term of two years starting from the end of Alexandre Bompard s term, covers the sector of distribution specializing in cultural and/or technological and leisure products for the general public in France, Belgium, Spain, Switzerland, Portugal and Brazil. In return for this commitment, Alexandre Bompard shall receive a gross compensation payment amounting to 80% of his fixed monthly compensation for a period of two years starting from the effective end of his term of office, whereby it is specified that the Board of Directors may waive implementation of this clause. In the Sixth Resolution, you are asked to approve the regulated agreement mentioned in the statutory auditors special report in Section 3.7 of the Registration Document, authorized as per deliberation of the company Board of Directors on July 30, 2013, and concluded in the course of FY 2013 in accordance with Article L paragraph 6 of the French Commercial Code. This regards the participation of Alexandre Bompard, Chairman and Chief Executive Officer, to the fixed-contribution supplementary pension scheme for all executives of Groupe Fnac in France. The contributions entailed in this measure amount to 7, for In the Seventh Resolution, you are asked to approve the regulated agreement mentioned in the statutory auditors special report in Section 3.7 of the Registration Document, concluded in the course of FY 2013 in accordance with Article L et seq. of the French Commercial Code. This agreement concerns the issuance of perpetual deeply subordinated notes ( TSSDI ) by Groupe Fnac SA for an amount of 60 million, authorized as per deliberation of the company Board of Directors on April 17, This issuance was fully subscribed in cash by Kering BV on April 24, This issuance is represented by 60 bonds with a nominal value of 1 million per unit, at an annual interest of 8%, specifying that the interest should only be paid in the event of a contractual repayment of the TSSDI, a distribution of dividends, premiums or reserves, an amortization or a reduction of corporate capital, or a buyback by the company of its own shares through a takeover bid that it initiates. These bonds are issued for an unspecified duration, except in cases of mandatory repayment and the option of advanced repayment at the discretion of the company, under certain conditions. In the Eighth Resolution, you are asked to approve the regulated agreement mentioned in the statutory auditors special report in Section 3.7 of the Registration Document, concluded in the course of FY 2013 in accordance with Article L of the French Commercial Code. This agreement concerns an understanding of removal from tax consolidation between Kering SA and Groupe Fnac SA and the French subsidiaries of this latter, authorized as per deliberation of the Company Board of Directors on April 17, In the Ninth Resolution, you are requested to approve the regulated agreement mentioned in the statutory auditors special report in Section 3.7 of the Registration Document, concluded in the course of FY 2013 in accordance with Article L of the French Commercial Code. This agreement concerns an understanding of tax consolidation between Groupe Fnac SA and its French subsidiaries effective as of January 1, 2013, authorized as per deliberation of the Company Board of Directors on April 17, Fourth Resolution Approval of a regulated agreement Special auditors report The General Meeting, deciding under the conditions of quorum and majority required by Ordinary General Meetings, and having reviewed the special statutory auditors report on the transactions and agreements referred to in Articles L et seq. of the French Commercial Code, approves the agreement concluded between Kering and Groupe Fnac in the course of the financial year in accordance with Article L of said Code. Fifth Resolution Approval of a regulated agreement Special auditors report The General Meeting, deciding under the conditions of quorum and majority required by Ordinary General Meetings, and having reviewed the special statutory auditors report on the transactions and agreements referred to in Articles L paragraph 6 and L et seq. of the French Commercial Code, approves the non-compete commitment of Alexandre Bompard, Chairman and Chief Executive Officer, as mentioned in this report. Ordinary General Meeting 2014 FNAC 13

16 Draft resolutions SUBMITTED to the Ordinary General Meeting of May 15, 2014, and Objectives Sixth Resolution Approval of a regulated agreement Special auditors report The General Meeting, deciding under the conditions of quorum and majority required by Ordinary General Meetings, and having reviewed the special statutory auditors report on the transactions and agreements referred to in Articles L paragraph 6 and L et seq. of the French Commercial Code, approves the participation of Alexandre Bompard, Chief Executive Officer, to the fixed-contribution supplementary pension scheme, as mentioned in this report. Seventh Resolution Approval of a regulated agreement Special auditors report The General Meeting, deciding under the conditions of quorum and majority required by ordinary General Meetings, and having reviewed the special statutory auditors report on the transactions and agreements referred to in Articles L et seq. of the French Commercial Code, approves the agreement between Groupe FNAC and Kering BV regarding the issuance of perpetual deeply subordinated notes ( TSSDI ) by Groupe Fnac SA for an amount of 60 million, as mentioned in this report. Eighth Resolution Approval of a regulated agreement Special auditors report The General Meeting, deciding under the conditions of quorum and majority required by Ordinary General Meetings, and having reviewed the special statutory auditors report on the transactions and agreements referred to in Articles L et seq. of the French Commercial Code, approves the agreement on removal from tax consolidation between Kering SA and Groupe Fnac SA and its French subsidiaries, as mentioned in this report. Ninth Resolution Approval of a regulated agreement Special auditors report The General Meeting, deciding under the conditions of quorum and majority required by Ordinary General Meetings, and having reviewed the special statutory auditors report on the transactions and agreements referred to in Articles L et seq. of the French Commercial Code, approves the agreement on tax consolidation between Groupe Fnac SA and its French subsidiaries, effective as of January 1, 2013, as mentioned in this report. Renewal of Directors Objectives of Resolutions 10 to 12 The information on the Directors proposed for renewal is reflected in Section Corporate Governance of the registration document and on page 10 of the present brochure. In order to facilitate the staggered renewal of the terms of the Board of Directors, and in accordance with the Internal Regulations of the board of directors, lots have been drawn to distribute the directors into three groups, and they are respectively obliged to resign from their offices before the General Meetings of 2014 and Brigitte Taittinger-Jouyet and Carole Ferrand, along with Alban Gréget, have thus resigned from their offices prior to this General Meeting. The proposal of the Committee of Nominations and Compensations is for you to renew their term of office for a threeyear period. In the Tenth, Eleventh and Twelfth Resolutions, we are asking you to renew the terms of office of Brigitte Taittinger-Jouyet and Carole Ferrand and Alban Gréget for a period of three years, expiring at the close of the General Meeting to be held in 2017, to approve the financial statements for the financial year ending on December 31, Accordingly, at the close of the General Meeting, the Board of Directors would be composed of ten members, six of them independent, and three women. Tenth Resolution Renewal of the term of Carole Ferrand as Director The General Meeting, deciding under the conditions of quorum and majority required by Ordinary General Meetings, and having reviewed the report of the Board of Directors, renews the term of Carole Ferrand as director for a period of three years, up to the close of the General Meeting to be held in 2017 called to approve the financial statements for the financial year ending on December 31, Eleventh Resolution Renewal of the term of Brigitte Taittinger-Jouyet as Director The General Meeting, deciding under the conditions of quorum and majority required by Ordinary General Meetings, and having reviewed the report of the Board of Directors, renews the term of Brigitte Taittinger-Jouyet as director for a period of three years, up to the close of the General Meeting to be held in 2017 called to approve the financial statements for the financial year ending on December 31, Ordinary General Meeting 2014 FNAC

17 Draft resolutions SUBMITTED to the Ordinary General Meeting of May 15, 2014, and Objectives Twelfth Resolution Renewal of the term of Alban Greget as Director The General Meeting, deciding under the conditions of quorum and majority required by Ordinary General Meetings, and having reviewed the report of the Board of Directors, renews the term of Alban Greget as director for a period of three years, up to the close of the General Meeting to be held in 2017 called to approve the financial statements for the financial year ending on December 31, Buyback of Shares Objectives of the Resolution 13 The authorization granted by the General Meeting to the Board of Directors on April 17, 2013 to trade in the shares of the Company will be expiring on October 17, In the Thirteenth Resolution, we ask you to authorize the Board of Directors once more to trade in the Company shares for a period of 18 months at a maximum purchase price of 55 per share, not inclusive of acquisition fees. This authorization would enable the Board of Directors to acquire a number of Company shares representing at most 10% of the company s share capital, primarily for the: allocation or transfer of them to employees and/or corporate officers of the company and/or Group companies (in particular, for share purchase options and performance shares); use of them in the context of operations for external expansion; delivery of the shares upon exercise of the rights attaching to securities that give access to the capital; cancellation of them; market-making under liquidity contracts. Thirteenth Resolution Authorization for the Board of Directors to trade in Company shares The General Meeting, deciding under the conditions of quorum and majority required by Ordinary General Meetings, and having reviewed the report of the Board of Directors, authorizes the Board of Directors to purchase or cause the purchase of company shares, with the capacity to delegate under the terms determined by the law in accordance with the provisions of Articles L et seq. of the French Commercial Code, primarily for the: implementation of any share purchase option plan for company shares under the provisions of Articles L et seq. of the French Commercial Code, or any similar plan; or allocation or sale of shares to employees as their part in company profits, or implementing any company or Group savings plan (or similar plan) under the conditions provided under law, primarily Articles L et seq. of the French Labor Code, or providing a free allocation of such shares in connection with a contribution in company securities and/or as a substitute for the discount, according to the applicable legislative and regulatory provisions; or allocation of free shares under the provisions of Articles L et seq. of the French Commercial Code; or generally, honoring of obligations associated with stock option programs or other allocations of shares to employees or executives of the Company or of an associate company; or awarding of shares when exercising the rights attached to securities conferring access to the capital through buyback, conversion, exchange, presentation of a warrant or in any other way; or cancellation of all or part of the securities thus bought back; or delivery of shares (in exchange, as payment or otherwise) in connection with acquisitions, mergers, demergers or capital contributions; or stimulation of the secondary market or the liquidity of Groupe Fnac shares through a market maker under a liquidity contract compliant with the ethics charter recognized by the Autorité des Marchés Financiers. This program is also intended to enable the implementation of any market practice that would be accepted by the Autorité des Marchés Financiers, and, more broadly, the execution of any other transaction compliant with the regulations in force. In such an event, the Company will advise its shareholders through a press release. The purchase of company shares may entail a number of shares, such that: The number of shares purchased by the company during the buyback program does not exceed 10% of the shares comprising the corporate capital at any time whatsoever, this percentage applying to a capital adjusted in accordance with the operations subsequently affecting this General Meeting, whereby it is specified that (i) the number of shares acquired Ordinary General Meeting 2014 FNAC 15